Smartphone parts manufacturers Viavi Solutions, Finisar and Ams said mass adoption of 3D sensing will not happen until next year due to bottlenecks on key parts – indicating that Apple will have at least two years lead in 3D sensing features.
China’s Huawei, Xiaomi and others could be almost two years behind Apple, which launched Face ID with its iPhone X anniversary phone last September, Reuters reported.
Google Android producers are struggling to source vertical-cavity surface-emitting lasers, or VCSELs, a core part of Apple’s Face ID hardware.
The development will be a big boost for Apple. “iPhone X surpassed our expectations and has been our top-selling iPhone every week since it shipped in November,” said Tim Cook, Apple’s CEO, said on February 1 during the company’s earnings calls.
Apple innovation
Apple’s spending on research and development (R&D) in the December quarter of 2017 was $3.4 billion against $2.8 billion in the same quarter previous year, indicating the iPhone maker’s focus on innovation. Apple is targeting revenue of $60-$62 billion in the current quarter.
Apple shipped 77.3 million smartphones worldwide in the December quarter of 2017, slipping 1 percent annually from 78.3 million in Q4 2016.
“Despite robust iPhone X demand and an iPhone average selling price approaching an incredible US$800, we note global iPhone volumes have actually declined on an annual basis for 5 of the past 8 quarters,” Neil Mawston, executive director at Strategy Analytics, said.
Sensing technology
Apple is betting on the 3D sensing technology that is expected to enhance the next generation of iPhones, enabling accurate facial recognition as well as secure biometrics for payments, gesture sensing, and immersive shopping and gaming experiences.
Analyst firm Gartner predicts that by 2021, 40 percent of smartphones will be equipped with 3D cameras, which can also be used for so-called augmented reality, or AR, in which digital objects cling tightly to images of the real world.
“It is going to take a lot of time to Android-based customers to secure capacity throughout the whole supply chain,” said Bill Ong, senior director of investor relations from Viavi. Viavi is seen as the only major supplier of optical filters needed for the 3D sensing modules.
“We may have a potential introduction of a second handset maker into 3D sensing at the end of this calendar year. But the volumes would be very low. In 2019 you clearly will see at least two or more android-based phones,” Bill Ong said.
Bill Ong declined to name the smartphone company that might launch an Android phone with 3D face recognition this year but said that Viavi was in talks with all the major smart phone makers to supply the filters.
Some Android phones with 3D sensing features have hit the phone market in small numbers, such as the Asus ZenFone AR released last year, but those models didn’t use the sensors for facial recognition like the iPhone X does.
Samsung’s current phones use a standard camera for facial recognition.
The development indicates that most Android phones will have to wait until 2019 to duplicate the 3D sensing feature behind Apple’s Face ID security.
Apple sourcing partners
Apple has been leading in innovation when it comes to new features on iPhones in the last 4-5 years.
When the iPhone 5S launched with a fingerprint-sensing home button in September 2013, for example, it took its biggest rival Samsung until just April of the next year to deliver its own in the Galaxy S5, with others following soon after.
The iPhone maker in December announced a $390 million deal to secure supplies from VCSEL-maker Finisar. Apple’s in discussions with major cobalt producers to nail down supplies for lithium-ion rechargeable batteries that power its mobile phones.
Lumentum is ramping up additional manufacturing capacity for VCSELs and edge-emitting lasers for the first half of fiscal 2019, according to the company’s earnings call.
Craig Thompson, vice president of new markets at Finisar, says interest in the technology is universal across the sector.
“Each customer has their own adoption timeline and rollout plan, which we can’t discuss, but we expect the market opportunity for VCSEL technology to increase substantially in 2019,” he says.
Austria-based Ams expects to have VCSEL chips widely available next year and says it has won a large deal with one phone maker.
“As part of a combined external and internal VCSEL supply chain where an external volume production supply chain is available to us, we are currently building internal VCSEL production capacity in Singapore,” Moritz Gmeiner, head of investor relations for AMS, said.
